Flexible Policy Approaches to Support Longer Working Lives

Australians are intending to work longer than ever before, but face a raft of barriers in prolonging their working lives. New research emphasises that the diversity of labour force engagement across the country requires flexible policy approaches to tap this latent talent.

High migration rates in the biggest cities are keeping median age steady, yet across Australia’s regions, the proportion of those reaching retirement age is accelerating. Australians over the age of 55 now account for more than a quarter of the local population in 340 regional Local Government Areas, from a total of 543 nationwide.

Despite the fact that more and more Australians intend to work beyond the traditional retirement age, even working past 55 can be a daunting challenge for many. Mature age workers search twice as long for work and are less likely to be offered training on the job. Additionally a lack of flexible employment options can force people out of work before they’re ready to retire.

For some regional economies, this will be a major challenge. In Eurobodalla on the South Coast of New South Wales, the number of people of working age appears to have peaked around 2010. Business owners wanting to grow in this labour market will need to act creatively to engage and retain older workers as there simply won’t be many others available.

In places like Port Hedland (WA), Alice Springs (NT), and Hobart (Tas), where participation rates of 55-64 year olds are above the national average of 59.8 per cent, this is less of an issue. In places like Bundaberg (QLD), Cessnock (NSW), and Shoalhaven (NSW) though, less than half of those aged between 55-64 are either in or looking for work.

An ageing population will have unique impacts on different regions. For example, certain regions will have lower participation rates of older residents precisely because they are desirable locations to retire. In others, the labour force will be comprised of more part time roles such as Yass (NSW) and Byron (NSW), or in Geelong’s case significantly more full time roles.

Of course, high participation rates also rely on a strong supply of good jobs within local economies to keep people engaged. Nevertheless, these elements contribute to the diversity amongst Australia’s regions and underline the need for tailored policy approaches.

The Federal Government’s recently announced Career Transition Assistance Program trials are aimed at supporting older workers to access training. This new Program complements the existing Restart wage subsidy encouraging businesses to hire workers over 50. While this is a positive start, the diversity of regional labour forces suggests a wider policy package is required to enact substantial change.

So far, our approach to the ageing issue and workforce engagement in general has been to enact uniform national policies. The demographic diversity of older Australians – where they live and how they work – means passive one-size fits all policy cannot be effective.

Instead, policy responses will need to better understand and reflect regional differences. Take for example, regions like Glenorchy and Bega Valley where 55-64 year olds exhibit low participation rates, as well as high proportions of people looking for part time work. It is unlikely that one policy alone would have a significant impact as both employability and job availability are needed. Instead, regions like this may benefit from a mix of policies that work to improve skills and qualifications, promote and support local businesses that implement flexible workplace policies, and encourage them to take opportunities to employ older workers.

International experience also suggests there are a wide array of policy options available:

Both Spain and Italy expanded access to Recognition of Prior learning (RPL), noting RPL can be more effective for workers in small businesses.

France implemented regional awards identifying and rewarding best practices in hiring and retention of older workers.

Denmark made changes to its version of the Work Bonus Scheme to improve uptake and encourage people to stay in work for longer.

The 2015 Intergenerational Report made clear the need to better engage older workers, with the share of over 65s expected to double over the next 40 years. Delivering the right mix of policies at the local level can deliver national benefits. Enabling longer working lives mitigates fiscal pressure on social security and healthcare costs, and ensures that Australians are better prepared for a retirement likely to be longer than any generation before them.